EU says Google may have abused its dominance, urges settlement

By Jim Puzzanghera, Los Angeles Times •May 21, 2012 6:54 pm

WASHINGTON — The top European antitrust official said Monday that an investigation has found Google Inc. may have abused its online dominance to squelch competition and offered the company a chance to settle the allegations to avoid formal charges.

“I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified,” said Joaquin Almunia, the head of competition policy for the European Commission. “Restoring competition swiftly to the benefit of users at an early stage is always preferable to lengthy proceedings, although these sometimes become indispensable to competition enforcement.”

“I hope that Google seizes this opportunity to swiftly resolve our concerns, for the benefit of competition and innovation in the sector,” he said, urging the company to offer proposals to remedy the problems “in a matter of weeks.”

A Google representative said the company disagreed with the findings, but was willing to discuss the European Commission’s concerns.

European officials have been conducting a formal antitrust investigation of Google since 2010 in response to complaints from some websites that the Internet search giant was treating their search results different than its own.

Microsoft Corp. is among those companies complaining that Google has been squelching competition by limiting access to some of its data from YouTube and other services.

If found guilty of formal charges, Google could face steep fines. In the United States, the Federal Trade Commission also is investigating Google for possible antitrust violations, and recently hired a prominent outside litigator to oversee the probe.

Almunia said Monday that preliminary conclusions from the large-scale investigation of the online search market “have led us to identify four concerns where Google business practices may be considered as abuses of dominance.”

The first involved the way Google displays links in general search results to its own services, such as those involving restaurants or other products, that compete with services from other companies.

“In its general search results, Google displays links to its own vertical search services differently than it does for links to competitors,” Almunia said. “We are concerned that this may result in preferential treatment compared to those of competing services, which may be hurt as a consequence.”

The second concern of European regulators is that Google might be copying original material from competitors’ websites without prior authorization.

A third problem involves agreements between Google and partners on websites that display search ads. Almunia said “the agreements result in de facto exclusivity” requiring the sites “to obtain all or most of their requirements of search advertisements from Google, thus shutting out competing providers of search advertising intermediation services.”

The fourth area of concern, he said, is that Google “imposes contractual restrictions” on software developers that prevent them from offering tools to transfer online search advertising campaigns from Goolge’s AdWords platform to those of competitors.

Almunia said he has sent a letter to Google Chairman Eric Schmidt outlying the concerns and offering the company “the possibility to come up in a matter of weeks with first proposals of remedies to address each of these points.”

A Google representative said Monday that the company had “only just started to look through the commission’s arguments.”

“We disagree with the conclusions but we’re happy to discuss any concerns they might have,” the representative said. “Competition on the Web has increased dramatically in the last two years since the commission started looking at this and the competitive pressures Google faces are tremendous. Innovation online has never been greater.”